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China Evaluates Trade Talks with U.S.; Mike Waltz Out as National Security Adviser; Israeli Drones Hit Humanitarian Aid Ship to Gaza; Netanyahu Says Defeating Hamas is Supreme Goal; Russia Attacks Ukraine's Zaporizhzhia, Putin Shifting Goals; Tensions Rising Between India and Pakistan; Workers' Day Rallies, Anti-Trump Protests Merge On May Day; Catholic Church To Start Choosing New Pope Wednesday. Aired 2-2:45a ET

Aired May 02, 2025 - 02:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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KIM BRUNHUBER, CNN HOST: Hello. Welcome to all of you watching us around the world. I'm Kim Brunhuber. This is "CNN Newsroom." China appears to be softening on trade talks, saying it's currently assessing proposals by the U.S.

The first major shakeup in the Trump 2.0 White House, National Security Advisor Mike Waltz is being shuffled.

And the Vatican has begun preparing the Sistine Chapel for the conclave to elect Pope Francis' successor.

And there's been a new development in Donald Trump's trade war. China now says it's considering a U.S. proposal to hold trade talks. I want to bring in CNN's Kristy Lu Stout who's live in Hong Kong. So, Kristy, did China blink first here?

KRISTY LU STOUT, CNN CORRESPONDENT: Well, China is hinting at a possible thaw here. We heard from its Ministry of Commerce earlier today. It's now saying that it is, quote, "evaluating the possibility of trade talks with the United States." And this marks a subtle but significant shift, and it could open the door to potential tariff negotiations.

This was delivered in an official announcement that was released by the ministry earlier today, this Friday. In this statement, the ministry said it was the Americans that have been reaching out while also adding lists. Let's bring up the statement for you. Quote, "The U.S. has recently sent messages to China through relevant parties hoping to start talks with China. China is currently evaluating this," unquote.

Now China has been standing firm as it's been locking horns with U.S. President Donald Trump over tariffs. Trump has been hiking up tariffs on China to an eye watering 145 percent with China retaliating and hitting back with its own tariffs on U.S. products at 125 percent. And Trump has been repeatedly saying that he's been having talks to Chinese officials only to have that denied by China.

We also heard something really interesting on Thursday, comments from America's top diplomat, Marco Rubio, the U.S. Secretary of State. He spoke to Fox News, and he said it's the Chinese who've been reaching out. Watch this.

(BEGIN VIDEO CLIP)

MARCO RUBIO, U.S. SECRETARY OF STATE: That's what they want. I mean, the Chinese are reaching out. They want to meet. They want to talk. We've got people involved in that. Obviously, our treasury secretary, Scott Bessent is involved in those efforts, and their talks will come up soon.

(END VIDEO CLIP)

STOUT: Okay. There have been signs of de-escalation in this trade war. As we've been reporting here on CNN, import agencies, they're telling CNN that China is rolling back retaliatory tariffs on U.S.- made semiconductor products. We also learned this week that Chinese suppliers have told CNN that major American retailers like Walmart, like Target, they have resumed orders.

And then we had this announcement this day from the Ministry of Commerce hinting at a potential thaw, hinting at potential open -- opening the door of talks. And if we could bring up the markets for you, you could see that the markets have been cheering all the signals that are going being out this day. If we bring up the markets, you could see markets here in Asia as well as U.S. futures, Nikkei, Hang Seng, Sol Kospi, all gaining.

U.S. futures as well, earlier at the last check, hinting at a stronger open when they open later today. And there it is. All green arrows. Kim, back to you.

BRUNHUBER: All right. Appreciate that. Thanks so much, Kristie Lu Stout in Hong Kong. A word of potential trade talks between the U.S. and China come as a massive tariff on millions of American purchases is now in effect. The de minimis exemption, as it's known, allowed goods worth under $800 to come into the U.S. duty free, and it reshaped the way Americans shopped. The loophole allowed ultra-low cost Chinese e-commerce sites like Shein and Temu to send everything from yarn to patio furniture to U.S. homes.

But with the loophole expired, those items will face tariffs of up to 145 percent. For more on this, I want to bring in Ryan Young who joins us from Chicago. He's a senior economist with the Competitive Enterprise Institute. Really appreciate you making the time, early this morning for us here.

So we'll get to the tariff deadline, passing in a second. But just on the latest news, what do you make of China potentially opening the door to trade talks? I mean, to this point, Beijing's been saying, essentially, it won't be pushed around by the U.S. So could this development be considered a win for president Trump? RYAN YOUNG, SENIOR ECONOMIST, COMPETITIVE ENTERPRISE INSTITUTE: I

doubt it. China is getting leveraged by the day, and we're going to see more evidence of that next week.

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The last ships to depart China that would not be subject to the 145 percent tariffs have already left, and next week is when they're going to start arriving at U.S. ports, first on the West Coast, then in the Gulf Of Mexico and on the East Coast. And when those ports are seeing a fifth to a third less traffic than they were just a year ago, that's going to cause serious problems. UPS has already announced layoffs. Consumers are going to face shortages and higher prices.

Most of what we import is actually intermediate goods that U.S. businesses use to make their products here in the U.S. So everyone is going to be feeling the pinch. And the more that happens and the longer that drags on, the less leverage that President Trump is going to have.

BRUNHUBER: Right. Okay. So you're saying for U.S. consumers, they will see prices go up basically starting in a week or so. I mean, businesses will now have to make a tough decision as well, right? Sell products from China at more than double their previous prices, or just stop selling them altogether. So what will this mean for small sellers?

YOUNG: They're going to get hit harder. The de minimis exemption that you mentioned earlier, that doesn't apply so much to the Amazon's or the Walmart's of the world. They import in bulk, so they already pay the same tariffs. Nothing changes for them. It's the small sellers who weren't paying tariffs, but now are going to start paying tariffs who are going to get hit.

They're going to see reductions in orders. A lot of them are going to go out of business altogether. Consumers are seeing prices more than double for the goods that they're importing. And they're going to get hit much harder than the big companies are.

BRUNHUBER: So you talked about how shipping is going to be affected here. JPMorgan expects a 75 to 80 percent drop in imports from China. So what will that mean more broadly for the supply chain?

YOUNG: That's tough to tell at this point because there is no plan. Some companies we saw were in a midnight rush to buy up supplies. Some consumers were doing the same thing. If you need a new laptop, buy it now before the tariffs hit. That sort of thing. Other companies are standing back. They're making a bet that maybe the tariffs will be gone in a month or in six months. Nobody knows who's right.

Hopefully, the tariff, the upcoming talks will happen and they'll go smoothly and we'll see some -- at least, some tariff reduction, but nobody knows what's going on. All we know is it's going to put a drag on the economy for as long as those tariffs are in effect.

BRUNHUBER: Yeah. Certainly, people don't appreciate all the chaos in the system right now. In the meantime, speaking of chaos, from a logistical point of view, I mean, what does that mean in practical terms for U.S. customs? Do they have now have to check every package coming from China no matter how small?

YOUNG: Yeah. And that amounts to more than $1.3 billion. They don't have the manpower to do it. President Trump tried to end that de minimis exemption back in January and he had to draw it back within a week because packages were already piling up in warehouses. It was already creating delays. And now U.S. Customs is in a position where it has to hire 20,000 people or more on very little notice. Who knows what kind of facilities problems they're having?

It's going to be unworkable. It's going to cause delays. It's going to cause supply chain problems all over, and it's not just for consumers, also for U.S. businesses.

BRUNHUBER: Yeah. All right. So given now that there could be trade talks, do you see the administration now maybe pausing this before prices actually rise?

YOUNG: My guess is that they'll lower tariffs somewhat, but they'll still be higher than they were when Trump took office. So a partial rollback, not a full one. The best hope for everyone involved, especially people in the U.S., is that while the president's never going to admit that he made a mistake, maybe someone could convince him to change his mind. I think that is the best way to proceed with negotiations.

BRUNHUBER: Yeah. We shall see. So hard to predict as you say. Ryan Young, really appreciate getting your expertise on this. Thank you so much.

YOUNG: Thank you.

BRUNHUBER: Donald Trump is making some changes in the way the White House is working, removing National Security adviser, Mike Waltz. We get more now from CNN's Jeff Zeleny at the White House.

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: In one of the first big staff shakeups of this new Trump administration, President Trump sending his National Security adviser, Mike Waltz, to the United Nations, and sending Marco Rubio, the Secretary of State, into the West Wing to be the temporary National Security adviser. This has been long in the works. Mike Waltz who, of course, initiated the -- one of the biggest scandals of this administration with the group chat on Signal about those war plans in Yemen a couple of months ago.

The president finally decided that it was time to send him away. Now this was a decision that could have been reached quite a while ago, but we are told that the president in the White House did not want to essentially give the satisfaction to "The Atlantic" magazine or other reporters who had written skeptically about this.

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But Mike Waltz, will be elevated if you will but, to set a confirmed position to be the ambassador to the United Nations. But for the president, it is not a position that he is that interested in. He has never, thought very, highly of the U.N. to say the least. So there's no doubt that Marco Rubio, a one-time rival to Donald Trump, now was one of his closest advisers.

He'll be working just steps away from the Oval Office as well as being Secretary of State. But the bottom line to all of this is, in this big shake up of this administration, the president clearly wanted to keep Mike Waltz, on the line if you will by giving him this other position. He well remembers the four National Security advisors from his first administration. Two of them wrote very harsh books about the president. So the president does not want that narrative to set in.

We also think the administration -- one administration official telling us the president was eager to change the conversation about the economy to be talking about this. Jeff Zeleny, CNN, the White House.

BRUNHUBER: All right. So coming up here on "CNN Newsroom," controversial comments from the Israeli prime minister. Why he's facing backlash from hostage families for the second time this week.

Plus, Pakistan holds military drills amid growing concern about a possible conflict with India. We'll look at what the U.S. is doing to try to calm the tensions. That's next. Stay with us.

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BRUNHUBER: A flotilla that says it's carrying humanitarian aid for Gaza issued an SOS not long ago after what it claims was a drone attack off the coast of Malta. The Freedom Flotilla Coalition told CNN 30 activists were onboard the ship when the attack happened in international waters. They said the vessel caught fire, has a hole in its side, and is sinking.

Now, no word yet on whether there were casualties. CNN can't independently verify this information or these images posted online. The Freedom Flotilla Coalition calls itself a network of pro- Palestinian activists working to end Israel's blockade of Gaza.

Israel's Prime Minister has revealed what he considers the supreme objective of the war in Gaza and is not bringing home the hostages. CNN's Jeremy Diamond has details.

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, the Israeli prime minister is now making clear for the first time that he believes defeating Hamas is more important than securing the release of the hostages. The Israeli prime minister in comments that came on Israel's Independence Day said that while Israel has many objectives in the war and that releasing the hostages is a, quote, "very important goal," he said that in this war, there is one, quote, "supreme objective." And he said that that supreme objective is, quote, "victory over our enemies."

This is the first time that we've heard the Israeli Prime Minister be so explicit about something which many of his critics have long suspected, that the prime minister was more concerned with the defeat of Hamas than with securing the release of the hostages. And these comments quickly drew criticism from representatives of the 59 hostages still today being held in Gaza.

The hostages' family forum saying in a statement that the release of the hostages is not less important but rather that it should be the, quote, "supreme goal" that should guide the government of Israel. They say that the hostage families are very concerned to hear these comments from the Israeli prime minister. And they also note correctly (ph) that a majority of the Israeli public, in fact, disagrees with him.

A majority of the Israeli publics, as many as 70 percent according to one poll, support a deal to free the remaining hostages and end the war in Gaza. This puts the Israeli prime minister though in the same camp as his right wing finance minister, Bezalel Smotrich, who said last week, a very -- made very similar comments last week saying that while releasing the hostages is important, it is not the most important goal of this current war.

And as the Israeli prime minister makes these comments, he is set to sit down with his security advisers on Friday to discuss plans to expand the war in Gaza. This is something that we've heard for over a month now from Israeli officials. These plans to expand ground operations in Gaza if Hamas doesn't agree to a new ceasefire to release additional hostages.

It's largely been viewed as a negotiating tactic up until now, but the Israeli prime minister by having this meeting tomorrow very much telegraphing that there is some real seriousness behind these plans to expand operations in Gaza. No clear timeline yet on when that will happen. As we know, those negotiations, still ongoing to see whether or not a ceasefire deal and hostage release deal can be reached to avert that expansion. Jeremy Diamond, CNN, Tel Aviv.

BRUNHUBER: U.S. Secretary of State Marco Rubio is reiterating that the White House wants a breakthrough soon in its peace effort between Russia and Ukraine. If there isn't one, he says, President Donald Trump may reassess the U.S. involvement in the push for peace. He spoke hours after Russia struck the city of Zaporizhzhia, reportedly killing one person and leaving eight others wounded. Ukraine says one man was trapped under rubble after the strikes and emergency crews were working to reach him.

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Meanwhile, Ukraine is denying accusations that it targeted civilians in the Russian occupied part of its Kherson region. Russia claims seven people were killed in a drone strike on a market southeast of the city of Kherson on Thursday. Ukraine says it didn't strike the market. It also says the attack only hit military personnel who were hiding among civilians.

Multiple sources tell CNN that new intelligence suggests Vladimir Putin may have shifted his short term priorities in Ukraine. Until recently, intelligence officials believed Putin thought he might have enough momentum to seize all of Ukraine. But now, U.S. and Western officials say Putin wants to focus on holding the territory he already controls. They also say he wants to improve relations with the U.S. to help Russia's struggling economy. In addition, senior U.S. officials say even if Putin signs a peace deal, he may try to resume the war later.

Defense Secretary Pete Hegseth reiterated U.S. support for India's fight against terrorism. He spoke with his Indian counterpart Thursday trying to prevent open warfare between India and Pakistan after gunmen killed 26 civilians in Indian controlled Kashmir last week. India accused Pakistan of being involved. Pakistan denies that. CNN's Nic Robertson has more on concerns about a possible conflict.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice-over): Pakistan's army tested combat readiness Thursday, training, they say, meticulously planned to simulate battlefield conditions. Tanks, troops, artillery, and fighter jets brought together far from the front lines with India, but a message for India nonetheless.

Pakistan's Army Chief Of Staff saying, "Let there be no ambiguity. Any military misadventure by India will be met with a swift, resolute, and notch up response. While Pakistan remains committed to regional peace, our preparedness and resolve to safeguard national interests is absolute."

India too testing its readiness for war, battleships bristling with weapons, launching salvos of cruise missiles. On the Indian side of the border, in disputed Kashmir, a safety drill these school children hope they'll never need. Practicing what to do if rising tensions along this de facto border with Pakistan flare to real fighting.

BALVIR KAUR, FORMER VILLAGE HEAD (through translation): Usually, 90 percent of the children living near border areas are aware of the safety measures, but we still need to make sure that they understand the need to keep themselves and their juniors safe.

ROBERTSON (voice-over): A week after a brutal attack killed 26 civilians in Pahalgam, some survivors still in hospital.

UNKNOWN (through translation): I heard two gunshots and saw a large gathering of people. When I reached the firing site, I rescued three individuals. We could not see a lot. We fled immediately after hearing gunshots.

ROBERTSON (voice-over): India says it has identified the attackers. Two of them, they claim, are from Pakistan and is blaming Islamabad, promising revenge.

NARENDRA MODI, PRIME MINISTER OF INDIA: India will identify, track and punish every terrorist and their backers. We will pursue them to the ends of the earth.

ROBERTSON (voice-over): Pakistan also warning India's retaliatory move to end a previously inviolate decades old water sharing agreement would be an act of war if they followed through. Tensions ratcheting up Wednesday. Pakistan's Minister Of Information warning India was planning an imminent attack. Asked by CNN Thursday, he demurred on details.

BECKY ANDERSON, CNN ANCHOR: Can you share what that intelligence is, sir?

ATTAULLAH TARAR, PAKISTAN INFORMATION MINISTER: We had a very reliable, very authentic intelligence at the operational level. Obviously, operational details cannot be shared, but, we had confirmed reports that India will attack Pakistan, and this is not the first time.

ROBERTSON (voice-over): Along the tense frontier, tourists are returning close to the scene of the attack. But security, however, much tighter than before, the sudden escalation in historic tensions.

UNKNOWN: Actually, we knew about the terrorist attack, but we still decided to come here, and we feel very safe when we come here. There are many army (inaudible) days and night to protect us, so we feel very safe and calm here.

ROBERTSON (voice-over): U.S., China, and U.N. officials are urging calm, hoping, as it has in the past, diplomacy will prevail.

[02:24:57]

But these two nuclear armed neighbors have blown past international interventions before. Thursday, India taking tensions a tiny notch up, banning Pakistani airlines from their airspace, matching Pakistan's move last week. Nic Robertson, CNN, Islamabad, Pakistan.

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BRUNHUBER: For thousands of people across the U.S., May Day rallies turned into Trump protests. But that story and more coming up. Please stay with us.

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KIM BRUNHUBER, CNN ANCHOR: A U.S. judge in Texas has ruled that President Trump unlawfully invoked the Alien Enemies Act to speed up some deportations. The Trump administration claims it's using the wartime law to target Venezuelan gang members.

But the judge wrote, quote, allowing the president to unilaterally define the conditions when he may invoke the and then summarily declare that those conditions exist would remove all limitations to the executive branch's authority under the, and would strip the courts of their traditional role of interpreting congressional statutes.

To determine whether a government official has exceeded the statutes scope. U.S. Vice President J.D. Vance told Fox News that the administration

rejects the judge's finding. Here he is.

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J.D. VANCE, VICE PRESIDENT OF THE UNITED STATES: First of all, the judge doesn't make that determination. Whether the Alien Enemies Act can be deployed. I think the president of the United States is the one who determines whether this country is being invaded. And under the Biden administration, it was.

We're aggressively appealing this stuff. We do think that the appeals courts and in particular, the Supreme Court, is going to recognize immigration enforcement is a core function of the president of the United States. If you tell the president he's not allowed to deport illegal criminals, then you're telling the president he's not allowed to be the president. We reject that.

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BRUNHUBER: Thousands of people rallied in the United States for May Day. Have a look.

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PROTESTERS: Say clear, immigrants are welcome here.

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BRUNHUBER: And some of those rallies, combined with protests against the Trump administration.

Sherrell Hubbard reports.

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SHERRELL HUBBARD, CNN CORRESPONDENT: Global citizens reveled in May Day, traditionally a day of protests and civil action for labor rights, also known as International Workers Day. Demonstrators advocate for fair wages and working conditions.

UNIDENTIFIED FEMALE: We're here talking about everything that's going on with these corporations. We got to let them know that without us, there would be no use.

HUBBARD: In the United States, May Day got a boost from the 50501 movement, short for 50 protests, 50 states, one movement. Protesters demonstrated against the Trump administrations actions over its first 100 days.

PROTESTERS: Stop Trump.

HUBBARD: Protesters from the May Day strong coalition say they are, quote, demanding a world where every family has housing, health, fair wages, union protection and safety, regardless of race, zip code or immigration status. Among the speakers, the family of Kilmar Abrego Garcia, a Maryland man wrongly deported to El Salvador.

JENNIFER VASQUEZ SURA, WIFE OF KILMAR ABREGO GARCIA: My husband was illegally detained, abducted and disappeared. Throwing away to die in one of the most dangerous prisons in El Salvador.

HUBBARD: Followers of the movement are optimistic that this national and international day of solidarity will bring change.

KATE OVERITH-SPECK, PROTESTER IN PHILADELPHIA: To show that we have a voice and we're not going to be quiet. We're not going to shut up. We're going to be loud.

HUBBARD: I'm Sherrell Hubbard reporting.

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BRUNHUBER: Dozens of Catholic Cardinals will gather inside the Sistine Chapel Wednesday to choose the next pope. We'll have a look at the preparations for the conclave and how the process will work. That's coming up. Stay with us.

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BRUNHUBER: Next Wednesday, the Catholic Church will begin the process of choosing the next pope. Cardinals from around the world are already at the Vatican in preparation for the conclave.

Rafael Romo gives us a look at the preparations.

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RAFAEL ROMO, CNN CORRESPONDENT: Preparations for the conclave are in full swing here at the Vatican, as more than 180 cardinals from around the world continue to meet and get ready to choose a successor for Pope Francis. The Holy See has released pictures showing construction work in the Sistine Chapel where, in keeping with tradition, the conclave will take place.

The pictures show metal and wooden beams being assembled to build the structures needed to accommodate all the cardinals that are eligible to cast ballots. All together, the Roman Catholic Church currently has 252 cardinals, but according to church rules, only those younger than 80 are eligible to vote, which means 135 cardinals can participate in the conclave.

Vatican spokesman Matteo Bruni confirmed earlier this week that two cardinal electors will not attend the conclave due to health reasons, and on Tuesday, Cardinal Giovanni Angelo Becciu, who was convicted of financial crimes by the Vatican, said he will no longer insist on participating in the conclave.

The cardinals decided earlier this week, the conclave will begin on Wednesday, May 7th. The Vatican has announced that day at ten in the morning local time, there will be a votive mass for the election of the pope here at saint peters basilica.

After the mass, the conclave itself will officially begin at 4:30 in the afternoon, with a prayer service in the Pauline Cchapel, attended by all the cardinal electors. Once the prayer service has concluded, the cardinals will enter in procession into the Sistine Chapel. The last two conclaves, held in 2005 to elect Pope Benedict XVI, and in 2013 to elect Pope Francis, lasted two days. Since Pope Francis was laid to rest on Saturday, the Vatican has held daily morning masses and the cardinals have met frequently to discuss church matters and get ready for the conclave.

Reporting from Rome, I'm Rafael Romo.

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BRUNHUBER: And finally, before we go, it was a winter wonderland in Hungary. As organizers, organizers tried to break the world record for the largest dog walk of a single breed, 500 dachshunds and their owners went for a stroll in Budapest on Thursday, but it wasn't quite enough to beat the previous Guinness World Record of 897, set last September. In Germany, organizers promised to rally more dachshunds and try again next year.

I'm Kim Brunhuber. "WORLD SPORT" is next, and I'll be back at the top of the hour with more news.

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